The directors have reviewed the future profit and cash flow projections in conjunction with the current economic climate as well as banking facilities in place to support all the operations, in order to express an opinion on the adequacy of working capital and the ability to continue as a going concern for the foreseeable future. These projections covered future financial performance, solvency and liquidity for a period of 12 months from the date of the release of these results. The directors have concluded that the Group will continue to be a going concern for the foreseeable future and therefore the results have been prepared on a going concern basis.

Covid-19 update

On 11 March 2020, the World Health Organization officially declared the novel coronavirus, Covid-19, a pandemic. Following this declaration and subsequent lockdowns, the Group’s immediate priority was to keep employees safe in accordance with government guidelines in all geographies of operation. This typically involved maximising working from home, social distancing and implementation of advised measures to limit the spread of Covid-19.

The multi-year investments in Westcon International’s advanced systems and business automation enabled business continuity plans to be deployed effectively with almost the entire workforce switching to remote working. Most of Logicalis’ global workforce was also able to work remotely, limiting disruptions during lockdown periods.

Although some delays and supply disruptions were experienced, especially in countries with highly restrictive lockdowns, the business operations coped very well and performed well ahead of expectations set at the start of the year. Increased demand for the Group’s technology solutions was experienced to support remote working during the lockdowns enforced throughout the world. In particular, demand for cloud computing, remote access solutions, virtualisation, security and unified communications remains strong.

The Group underwent restructuring initiatives to reduce Covid-19-related risks, and to reduce its cost base.

The Group is not only focused on managing the risks brought about by Covid-19, but also on the opportunities it creates in the accelerated digitalisation it has brought about. The Group is well positioned to continue to benefit from this evolution. The positioning of the Group’s divisions remains strategically sound with good demand for their solutions and services expected to continue as the world emerges from the current crisis and investments towards digital transformation accelerate.

Solvency

The Board has determined that the Group is solvent with net assets at 28 February 2021 of US$582.0 million (FY20: US$572.3 million) and tangible net assets of US$268.7 million (FY20: US$281.0 million). The Group is expected to remain solvent over the next 12 months.